Interim Report The Group 1 January – 30 September 2020 MagnoliaQ Bostad | Bokslutskommuniké januari – december 2017 3 1 Value development on investment proper- ties and sales drive the quarter's results January – September 2020 Significant events July – September 2020 • Net sales amounted to SEK 1,785 m (395). • Reclassification of projects for developing as self-managed • The operating profit was SEK 627 m (333), of which SEK 96 properties. These now make up 56% of the building rights m (352) refers to changes in the value of investment proper- portfolio. ties. • Formed new joint ventures with Heimstaden Bostad and • The net profit before tax for the period was SEK 497 m (204) Derome for joint development of 1,600 residential units and and the profit after tax was SEK 486 m (148). 1,500 detached houses. • Earnings per share after deductions for minority shares was • Signed agreements for the acquisition of four projects for the SEK 11.91 (3.33). development of 2,345 estimated building rights, of which 2,090 for self-management in Kungsbacka, Haninge and July - September 2020 Upplands Bro. • Net sales amounted to SEK 281 m (119). • Production start and sale of 231 residential units in Partille to • The operating profit was SEK 187 m (148), of which SEK Heimstaden Bostad. 126 m (183) refers to changes in the value of investment • Production start of four projects of 890 residential units for properties. self-management, of which one project is a community ser- • The net profit before tax for the period was SEK 145 m (106) vice property. and the profit after tax was SEK 119 m (73). • Earnings per share after deductions for minority shares was Significant event after the end of the quarter SEK 3.00 (1.64). • Issue of new, unsecured, green bond loan of SEK 550 m and voluntary buy-back of certain outstanding bonds. Distribution of building rights portfolio, Distribution of residencies under production with sales status as share of building rights of 30 September 2020, share of residencies 14% 10% 9,370 44% 20,346 building rights 56% 1% residencies under production 75% Self-management For sale Sold Not sold Self-management Self-management through JV 2020 2019 2020 2019 2019/2020 2019 KPIs, Group⁴ Jan-Sep Jan-Sep Jul-Sep Jul-Sep Oct-Sep Jan-Dec Project-related Number of production starts during the period¹ 3,219 1,333 1,121 412 4,564 2,678 Number of sold residencies during the period¹ 3,478 249 232 28 3,762 533 Total number of residencies in production¹ 9,370 8,312 9,370 8,312 9,370 9,284 Number of estimated building rights in the portfolio, not yet production started¹ 20,346 18,281 20,346 18,281 20,346 18,037 Financials Operating profit/loss 627 333 187 148 660 366 Investment properties (SEKm) 1,116 719 1,116 719 1,116 654 Return on equity (%)² - - - - 35.8 13.2 Equity/assets ratio (%) 35.8 28.5 35.8 28.5 35.8 28.1 Interest coverage ratio (multiple)³ - - - - 4.1 1.4 Share-related Earnings per share (SEK)² 11.91 3.33 3.00 1.64 11.99 3.41 Equity per share (SEK)² 39.45 27.44 39.45 27.44 39.45 27.55 ¹ No adjustment is made for projects developed in JV. 4 From Q2 2020, Magnolia Bostad has applied changed principles for the ² Excluding the minority. consolidation of tenant-owner associations. For further info see page 27. For defi- ³ Calculated on rolling 12-month basis. nitions of alternative KPIs that are not defined in IFRS and other definitions, see page 30 . Magnolia Bostad | Interim Report January – September 2020 2 CEO, Fredrik Lidjan We have greatly increased developing properties for self-management If we look at all the self-management back SEK 347 m from our bond pro- projects, which are currently at one gram of SEK 600 m maturing in of our various stages of develop- 2021. Through this. we have ment, they have a total value on achieved an improved maturity completion of SEK 33.4 billion and structure and a green classification estimated rental income per year of of the company's revenue stream SEK 1.5 billion. Our intention, ac- and investments, which confirms our cording to our current strategy, is to sustainability work over the past collaborate with financially strong JV years. partners for jointly developing the properties. This would mean that Moving forward Magnolia Bostad's share upon com- With the ending of this quarter, I pletion would be around SEK 17 bil- would like to thank you all. There is lion and generate rental income of only just over a month left before Jo- around SEK 0.8 billion. The first han Tengelin takes over as Magno- completion will be in 2021 and the lia Bostad's CEO. completion of the last project in the Our operating profit for the first nine portfolio will be in 2035. I have had six fun years as CEO. months of the year was SEK 627 m, During these years we have gone and for Q3, SEK 187 m. The results Sales, acquisitions and new col- from a building rights portfolio of for Q3 include SEK 126 m relating to laboration around 4,000 building rights to a changes in the value of investment During the quarter, we sold addi- portfolio of over 20,000. We have properties. tional residential units within the completed almost 5,000 residencies framework agreement with and over 9,000 are currently in pro- In accordance with what we have Heimstaden. This time it was 231 duction. The company has today previously communicated, we have residential units in the new urban reached a maturity that corresponds taken the next step towards devel- district of Partille Port in Partille mu- to my ambitions when I took over as oping properties for self-manage- nicipality outside Göteborg CEO. ment. In this way, we want to create a long-term increase in the net asset We added 2,345 building rights to When I took over, the company con- value of the company and a stronger our portfolio over the quarter. This sisted of eight employees and now cash flow that provides stability to happened through the acquisition of we are well over 100. A big thank the company's finances. properties in Handen, Haninge mu- you to all the fantastic employees nicipality, Kungsängen in Upplands- who have each contributed to the We currently have a building rights Bro municipality and Hede in Kungs- company's growth. portfolio of around 20,300 building backa municipality. The develop- rights. During the quarter, more than ment in Hede is taking place through A special thank you to Magnolia half of our building rights portfolio a collaboration in a new JV with both Bostad's board and Fredrik was set aside for developing self- Heimstaden Bostad and Derome. Holmström who created the condi- management properties and four We have also signed an agreement tions for the company to grow. I wel- projects for self-management were with Heimstaden Bostad and come Johan Tengelin to a very com- production-started. Derome on jointly developing and mitted company. building around 1,500 detached The majority of the residencies de- houses, a large part of which are veloped for self-management will be currently included in the current Fredrik Lidjan developed in JVs, of which Magnolia building rights portfolio. CEO Bostad will own half upon comple- October 2020 tion. Production-started projects for Our first green bond self-management have an estimated It was really enjoyable to issue our property value at completion of SEK first senior unsecured green bond of 5.1 billion. These projects are SEK 550 million maturing in 2024. planned to be completed over the Interest in the bond was high and re- period 2021 to 2025 and rental in- sulted in an oversubscription, which come per year is estimated at SEK confirms the market's confidence in 239 m. the company. In connection with the issue of our green bond, we bought- Magnolia Bostad | Interim Report January – September 2020 3 Project events during the period Acquisitions During the 9-month period, a total of tenant-owner projects are environmen- During Q3, four projects were acquired 3,478 residential units were sold, of tally certified or built according to the with a total of 2,345 estimated building which 1,124 in three previously produc- Swedish Green Building Council’s silver rights. During the 9-month period, Mag- tion-started projects within the frame- certification or the Nordic Swan Eco- nolia Bostad acquired 13 projects work agreement with Heimstaden and label. around the country with around 4,900 the Björnbäret project in Kalmar. The building rights. project is certified according to the Swe- Environmental certifications dish Green Building Council’s silver cer- During the 9-month period, we have cer- Production starts and project sales tification, is built of wood for lower cli- tified four projects according to the Swe- During Q3, the production process mate impact and has an energy dish Green Building Council’s silver cer- started on five projects with a total of consumption that is about half as high tification 1,121 residential units, of which 890 are as the legal requirement. 25 residential being developed for self-management. units were also sold in already started Environmental audits were performed in The production process was started of a tenant-owned apartment projects. three projects in Q3, of which one audit total of 3,219 residential units for the 9- concerned design and two audits con- month period.